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Earnings: 3 Hot Stocks to Watch in January

The market has seen lots of volatility in recent months as interest rate hikes and U.S.-China trade tension has prompted some investors to be more cautious about their outlook for stocks. But as earnings season ramps up over the next few weeks, corporations will get a chance to influence the market as they release their latest quarterly earnings.

Three notable companies scheduled to report earnings this month are Netflix(NASDAQ: NFLX), Apple(NASDAQ: AAPL), and Facebook(NASDAQ: FB). Each of these tech stocks has a lot to prove as investors reevaluate the prospects of these popular companies amid heightened market uncertainty. Ahead of their earnings releases, here's a preview of some key items to watch when their results go live.

A young couple watching TV

Image source: Getty Images.

1. Netflix

Scheduled to report its fourth-quarter results on Jan. 17, streaming-TV giant Netflix is the first of these three companies to report earnings.

Investors will want to keep an eye on Netflix's member growth. Netflix's quarterly net member additions have come into the spotlight recently, as the company missed its own forecast for the key metric in Q2 but then handily beat its forecast for Q3. Of course, management frequently reminds investors that its forecasts are not conservative, but instead strive for accuracy; so occasional misses should be expected. Nevertheless, with Netflix's Q2 miss still fresh in investors' minds, investors will likely be watching the metric extra closely when the streaming-TV company reports its third-quarter results. Management guided for 9.4 million net member additions in its fourth quarter -- 1.8 million in the U.S. and 7.6 million internationally.

2. Apple

Tech giant Apple surprised investors (not in a good way) earlier this year when it said revenue in its first quarter of fiscal 2019 was about $5 billion below the low end of its guidance range for the period. Weaker-than-expected iPhone sales in Greater China, Apple CEO Tim Cook said, were the main reason for the quarter's shortfall relative to management's guidance.

While the preliminary update on Apple's fiscal first-quarter results did give investors a look at several key metrics for the quarter, there was one important key figure missing: earnings per share. All investors know about the company's earnings at this point is that management still expects to report record earnings per share for the quarter. This means revenue will be greater than $3.89 -- Apple's current quarterly record earnings per share, which was set in the company's first quarter of fiscal 2018.

Apple will share its fiscal first-quarter results on Jan. 29.

3. Facebook

For social network Facebook, the key metric to watch will be revenue growth. With the company's privacy and security practices coming into the spotlight recently, investors will look to see if the negative press surrounding the company is affecting revenue growth. Facebook is a seeing a trend of decelerating revenue growth recently -- and management expects this deceleration to continue. Could the deceleration be worse than expected, or could the market's worries prove to be overdone?

Revenue in Facebook's third quarter was up 33% year over year, down from a growth rate of 42% in Q2. Management guided for this growth rate to be between about 24% and 28% in Q4. Investors should look for the social network's year-over-year revenue growth for the period to be within this range.

Daniel Sparks owns shares of Apple and Netflix. The Motley Fool owns shares of and recommends Apple, Facebook, and Netflix. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.